Q&A: Saavn Plans Video Streaming on Smartphones

Saavn, the South Asian online music streaming service often known as the Spotify of India, is expanding into the Middle East and Far East where there is a predominant demand for Indian music labels. It also plans to add music video streaming in the future.

Screenshot of Saavn

Saavn

Founded in 2006, Saavn shot to fame by becoming the first Indian music store on Apple’s iTunes. But in 2010, the startup decided to directly approach consumers with its own services.

Saavn earns money by selling advertisements to companies and subscriptions from users in India and in North America. It counts over 60 companies including Google, Facebook and Samsung as its advertisers and partners. The company also preloads its music apps in smartphones as well as sells services through cellphone operators.

The New York-based firm on Tuesday signed up India’s two biggest carriers, Bharti Airtel and Vodafone India, as operators billing for their music streaming service.

Bhat: The user base has been growing quite briskly. We are averaging about 5%-10% increase in our user base every month. We are seeing 60-minutes of listening time, every time someone comes to the website or application.

On the mobile, in particular, we are seeing a lot of return users — almost 7-8 times every month people return back to the app, which is very exciting for us, because ultimately mobile is the place where we see Saavn as a valuable provider. We have added a bunch more labels which accounts for 900 record labels with which we work with out of India, and the total market is well over a 1,000 record labels. It is across 22 languages and 35 dialects.

We have 11 languages that are live including in this market, with about 1.1 million music tracks. It is about half in India and half outside of India. The dominant market out of India is the U.S., followed by U.K., then Canada, Middle East and Southeast Asia like Singapore and Malaysian. People are accessing Saavn actively from about 150 different countries. It’s a global service.

We have had a number of distribution partnerships. We have also announced a partnership with Firefox to plug the Saavn app on the browser and track users and their usage.

WSJD: How is your strategy different from competitors?

Bhat: We offer purely South Asian content today. We have English music for this market only and other South Asian countries. We are not going to be where Spotify is, or Pandora is, or those kinds of services. They are already sort of addressing these non-South Asian markets doing a great job.

WSJD: What is the problem that you are trying to solve in the music streaming market as a startup?

Bhat: The problem is very similar to what is happening in India and the rest of the emerging markets — it is access to music. No proper access to music and a great experience toward listening to it, is moving people to piracy. India is like the number one pirated market in the world, but that happens in China, that happens throughout the Far East and it happens in the Middle East because they are not using compelling music services that are able to deliver that great music experience. The addressable market is 500 million.

WSJD: What are your major sources of revenue, and are you exploring new avenues for sales?

Bhat: There are three ways to look at value. One is advertising, and there are sixty brands that we work with. We have been sold out for the last six months. The second way is through paid subscription. The third one is integration into mobile carriers’ data plans.

The other thing with the operators is zero-rating or whitelisting Saavn. Every time you use Saavn you don’t get charged for data. When you click on the advertisements or when you go to YouTube, or when you go to check your email or when you go shopping on Flipkart or something, that’s when you start seeing a charge happening there.

The operator looks at us as a customer acquisition cost and a loyalty as well. In that particular case whether we are bundled into data pack we will be sharing the data revenues with the operators. If it is a general white list then there is no money that is actually shared.

WSJD: Are your profitable and what is your revenue now?

Bhat: We are not profitable. We haven’t disclosed our revenue, it is in the millions.

WSJD: Are you growing in terms of users? And what is fueling that growth?

Bhat: The user base has increased by six times over the last two years. Streaming volume has increased by over 40 times in the same period. The growth is coming from preinstalled apps, it is coming from Facebook, Twitter, and music streaming app Shazaam. It’s coming from search engines and word of mouth.

WSJD: Where is your next user and usage growth going to come from?

Mr. Bhat: The way we are targeting users is on Whatsapp, YouTube and Facebook. These consumers we can address directly today. A data enabled device is in our target market.

WSJD: What are Saavn’s future plans?

Mr. Bhat: We are laser-focused on audio right now and there will be lot of innovation that will be done around audio. Very shortly we will get into music videos and full-length movies.